The Lean start-up is a system to build a new company or launch a product on behalf of a present company. It was introduced by an american entrepreneur Eric Ries.
The method of lean start-up promotes the production of products that consumers already desire. Therefore, the market is ready as the product is launched. Rather than hoping for its success.
In lean start-up, if an idea is failing, it will fail quickly and cheaply instead of slowly and expensively, hence it is termed “fail-fast.”
Launching the Minimal Viable Product (MVP) and innovating it according to the customer’s needs is the lean way to start up.
· Write a good business plan.
· Don’t expect perfection – stay alive with incomplete product.
· Shift your focus to your customer’s needs.
· Stay alive and hustle.
Principles of lean start-up
1. Businesses can be started anywhere. For example, it can be a garage, room, warehouse etc.
Anyone can be a businessman with a business-oriented mind. Train your mind to be that of an entrepreneur.
You can be a doctor, engineer, teacher, animation artist, cartoonist, lawyer anything and still be a businessman.
2. Secondly, a lean start-up is like starting a new company. It is an organization, not just a product. Therefore, it requires good management.
3. Lean start-up does not exist just to make products, money or serve their customer. They exist to be a good business and set an impression in the market.
4. Some boring but important aspects to focus on are how to measure progress, prioritize work and achieve milestones. It improves the outcome of the lean start-up. Moreover, it requires new accounting techniques specific to start-up.
5. The primary task of getting started is to create products based on ideas. Its a learning by doing minimal approach. Find how customers respond and then learn how to win or maintain.
Steps to start a lean startup
Find a start-up idea: when choosing a business idea for lean start-up, it is important to think that the problem solved by your product is important enough for customers to want to buy. Hence, it is important to pay attention to the problems people face every day to find what customers are searching for.
Register your startup : now that you have got an idea, get your startup registered. Also get the necessary licenses for your startup. You should start with company registration.
Execute the idea: build your product and bring it to market before it is even ready. As a result, it will create brand awareness and interest. On the other hand, keep raising funds for your start-up. Because even the lean start-up needs some funding.
Validate your idea: product validation is the most important step in building a successful lean start-up. Now experiment with your product with the real buyers and analyze their reaction. Finally, use the database to decide. If you should continue the production, make improvements or change the strategy.
For instance, if the results are positive continue the production. Similarly, if the results are both positive and negative improve the product or make some changes accordingly. However, if the result is negative think over your business strategy.
Advantages of the lean start-up
· You are more familiar with your customer’s needs.
· You can react to market opportunities immediately whereas big companies need months or years to do so.
· Develop a deep focus on a target market. This gives you a powerful advantage as you can have a deep understanding of your customers pain points, needs and shopping process.
· You can grab smaller opportunities. They may look small now but they may have the growth potential.
· You can innovate fast & efficiently.
Examples of lean startup
Drobox – the file hosting service has more than 15 million paying users worldwide but started life as a small mvp with a 3-minute screen display showing consumers what dropbox can do.
Zappos – When Nick Swinmurn started zappos, they weren’t sure if customers were willing to buy shoes online. But instead, Swinmurn wanted to test his view and he did it with a minimum viable product.
Why do start-ups fail?
Cash-related issues is a reason why funded start-ups failed. With 40% of the combined startups citing – running out of funding as a reason for their failure. Also, 28% of start-ups lacking funding support, blame on lack of funding for their closure.
A start-up producing a product that nobody wants results in failure. So the need of the hour is to keep it lean and adaptable.